How borrowers enter default
Borrowers enter default when they miss at least 270 days of payments on their student loans. Around day 330 to 360 of missing a payment, your loan goes into collections, says Betsy Mayotte, president and founder of The Institute of Student Loan Advisors. That’s when all the consequences kick in, like having your default reported to credit bureaus and having your tax refunds seized, she adds.
There are two options the federal government offers borrowers to exit default and resume paying off their loans in good standing: loan consolidation, which allows borrowers to quickly merge different loans into a single debt with lower monthly payments and a longer loan term, and loan rehabilitation, a longer process in which the borrower enters into an agreement to make nine on-time payments within a 10-month installment loans for Alabama period, with the payment amounts based on the borrower’s circumstances. Continue reading Student Loan Refinancing can lower interest rates and help pay off debt quicker
